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Startup Stock Options – Why a Good Deal Has Gone Bad

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Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#181

Post by atomical »

jerguismi wrote: post #30
rooam-dev wrote: post #27

Earlier quoted context omitted.

At a start-up? How do you manage live/work balance? Are there any on-call duties? Thanks in advance.

There seems to be some kind of understanding that start-up means aways working overtime etc. AFAIK that is not often the case, but people can work quite normally in early-stage companies as well. And mostly it is the founders who are working hard and employees are not required to work the same way.

I've worked at mostly startups and I have had a normal work schedule except for maybe 1-2 days a year.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#182

Post by orthecreedence »

ryanSrich wrote: post #152
seibelj wrote: post #3

Valid reasons to work for a startup: - You are a cofounder. - You have little experience and you are using this to break into the industry, and get experience on many different technologies ("wear many hats"). - They are working on a very specific problem or using a specific technology that you strongly desire to work on and it's difficult to do it anywhere else. - You want to work a certain way (remote, on the beach…

> Work / life balance Disagree here for one specific type of startup...remote (which I know you mentioned). Here's an example day at BigCorp: - Rise and shine at 5am to work out early enough - Leave the house by 7am - 1+ hour commute into work - Start work at 8am - Stay until 8pm - Get on/in the car, train, bus for a 1+ hour commute home - Late dinner around 9pm - Veg out because you're exhausted and go to bed by 11p…

You're being downvoted, but I agree.

I worked at a BigCorp and it was one of the worst years of my life. The work/life balance was awful, and the pay was shit compared to the hours I put in and satisfaction I got out of the job. All other experiences I've had have been much more satisfying.

On top of this, people think BigCorp is a safe bet where a startup is not, but BigCorp lays people off in large swaths all the time because their stock price moves a millimeter in some random direction.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#183

Post by kabdib »

I made a bunch of money from ISOs at large, established companies.

I made zero (well, negative, really) from startup stock options, even before things got really shifty in the 2000s. One startup that I left, that is now a billion dollar company, simply decided to "extinguish" the shares I bought a few years after I resigned. I was probably cheated, but it's not worth the effort to go after them and they know it.

Treat startup options as wastepaper. You might get lucky, but it's really, really unlikely.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#184

Post by dsfyu404ed »

666lumberjack wrote: post #175
jessaustin wrote: post #132

Earlier quoted context omitted.

I'm pretty certain I've heard Amazon described as "evil". Apple are less objectionable, but I'm sure there are some things that some body wouldn't like.

Most plausibly their: - Attitude to third party repair - Puritanical content restrictions - Apparent disdain, in many cases, for their 'power users'

Which seemed like a big deal in 2009 but here in 2019 with the misdeeds of Facebook, Google and Amazon they look like a shining beacon of corporate ethics. Funny how things change.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#185

Post by TuringNYC »

wolco wrote: post #146
deanmoriarty wrote: post #102

Earlier quoted context omitted.

Unless you mean both spouses should earn around 200k and thus bringing in a FAANG-equivalent income of 400k, I really don't know how you could afford what you are saying on a single 150k-200k salary (and perhaps another 50k for your spouse's salary, since not everybody works in tech). After paying for CA taxes, fed taxes, kids' schools, rent, car expenses, 401k contributions, I really don't know how you would come up…

Why would it matter 20% or 700k as a seller I get the full amount from the bank.

Because most offers are "subject to favorable financing" and if the person doesnt get favorable financing, the offer falls thru and the seller ends up holding the housing longer w/o a seller and paying the carry. People will often sell at a lower absolute price (slightly lower) for all-cash offers without the issues of financing.

Also, financing can fall thru for silly reasons (eg the bank found some crazy lien from the 1940s) and want it cleared before they offer financing.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#186

Post by defen »

opportune wrote: post #180
defen wrote: post #153

Earlier quoted context omitted.

> Berkeley has pleasant single family homes in a great school district around the $1MM mark. You can absolutely do that on $200k/year. Let's say you make $200k/year and manage to put together a $300k down payment and get a $700k mortgage at 3.8%. Here is the breakdown of your annual spending (using 2018 numbers): $18,500 to 401K $35,930 in federal income tax $10,593 in FICA (Social security and medicare) $13,724 in C…

Since we've already accounted for all housing and car payments (btw, your car ownership costs are way too high as a lower bound. I would say an decent $10k car you hold on to for 5 years at a time would have total annual costs closer to $5/year) that doesn't sound bad at all

I was using the numbers here: https://www.nerdwallet.com/blog/loans/total-cost-owning-car/ but you could certainly get it down a bit if you don't mind driving an older car.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#187

Post by TuringNYC »

ssalazar wrote: post #90
seibelj wrote: post #3

Valid reasons to work for a startup: - You are a cofounder. - You have little experience and you are using this to break into the industry, and get experience on many different technologies ("wear many hats"). - They are working on a very specific problem or using a specific technology that you strongly desire to work on and it's difficult to do it anywhere else. - You want to work a certain way (remote, on the beach…

> Invalid reasons for working at a startup: > - Making a lot of money in salary. Once a startup raises a series A is there actually any reason to pay below-market? Fresh out of college I was employee #1 at a startup that had funding, and was basically at the mythical "Google salary for new college graduate" figure that is thrown around here, and higher than competing offers from name brand tech cos.

>> Once a startup raises a series A is there actually any reason to pay below-market?

Yes, because there is a greater fool competing with you who seems to thinking the theoretical value of their illiquid options is worth a trade-off for equivalent actual cash.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#188

Post by praptak »

pnw_hazor wrote: post #103
dasil003 wrote: post #45

Earlier quoted context omitted.

FANG is undisputably the best risk-adjusted compensation return for a programmer, and they're up there in terms of working with super smart colleagues, and therefore they have a high floor, compared to say a startup that goes nowhere with the blind leading the blind, but the ceiling is also constrained by what projects you're working on. In terms of raw software engineering development there's probably no substitute…

Though at F and G there is the cost of having to rationalize working for an organization that is evil.

What are the chances of the startup becoming successful and not turning evil?

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#189

Post by arcticbull »

jpm_sd wrote: post #109
mdorazio wrote: post #43

Earlier quoted context omitted.

FWIW, I've worked with a lot of entry-level people at normal companies over the years and would estimate that noob gainz are 30-50% higher in startup land for the first 1-2 years of career, maybe 10-20% higher the next two, then flat or actually lower than corporate thereafter. I think it comes down to 1) startups pile a lot more responsibility onto their young hires than normal companies are comfortable with + 2) st…

I've worked at two startups, then a BigCo, and now another startup. The wearing of many hats was definitely a leveling-up experience, but I felt that I plateaued in just the way you describe. Equity from both of those first two startups is now worth zero. In my years at BigCo I worked with engineers who have 10-20 years more experience than I do. Often felt like the dumbest guy in the room. I learned a ton. No compar…

I feel similarly; I started my career at a BigCo, didn't get much out of it, joined a fairly young company, with (1) more responsibility than someone of my tenure should reasonably have due to (2) high tolerance for failure and (3) they didn't have headcount for the specialized role I was doing. Going back to a BigCo, the experience there was utterly invaluable. I realized that my first go round I had absolutely no idea what I should even be trying to get out of it. This time's different.

There's huge value to getting the lay of the land.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#190

Post by arcticbull »

fjp wrote: post #150
enjo wrote: post #129

Earlier quoted context omitted.

Yes startups will give you more responsibility, but that comes at the cost of far less mentorship. I often wonder if people only feel like they're growing faster at startups because the results are a bit more visible. It is true that it's easier to be stagnant as an associate at a larger company. If you're not interested in taking on new challenges you can generally sort of fall through the cracks. However, folks who…

You're not taking into account when the larger company simply won't allow you to to work on X because you're not the right team, title or level. You may never get to manage a cloud VM. You will probably never get to help decide how a CI build pipeline works, how engineering hiring should work, etc etc. I'm not discounting your point about learning to develop software at scale, but your overall scope of responsibility…

You won't get to do those things at BigCo likely until you've done it at a startup.
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